Blockchain Development: 5 magnificent layer 2 scaling solutions with the potential to disrupt the blockchain ecosystem
Blockchain Development on layer 1 suffers from multiple issues, ranging from scalability to environmental degradation. For example, Bitcoin and Ethereum cannot handle numerous settlements per second. And this hinders their strategic expansion. On the other hand, Layer 2 solutions are highly scalable and handle innumerable transactions per second (TPS). Here we focus on the leading layer 2 scaling solutions for blockchain development.
What is crypto layer 2 for blockchain development?
Crypto L2 solutions are different solutions that are put forward to overcome scalability and transaction speed issues. They help in delivering a Blockchain development solution that is robust and affordable. Prominent examples of Layer 2 solutions include Bitcoin’s Lightning Network and Ethereum’s Plasma.
Layer 2 scaling solutions introduce a secondary model, where crypto settlements and processes happen without the involvement of the main chains. Due to this capability, many refer to these solutions as off-chain.
Advantages of using layer 2 scaling solutions
There are multiple perks to enjoy for using Layer 2 solutions for Blockchain development. Below are some advantages of using these solutions:
- No change to the underlying blockchain structure: A key benefit of Layer 2 solutions is that you don’t need to change the base layer. This is because the solution is an additional attachment to the main layer. The extension of this layer to the mainet enhances the safety and scalability of the platform.
- Enhances information confidentiality: In most cases, transactions on layer 1 solutions are open for public view. Although being transparent is good, some companies prefer keeping their sensitive information private. In these situations, Layer 2 solutions come in handy.
- Information locality: Public blockchains have problems concerning data locality. Layer 2 scaling solutions allow data to be kept at a particular location.
- Development of scalable solutions: Layer 2 enables the creation of expandable Blockchain development solutions. These solutions can be used in multiple fields.
Fundamental Ethereum crypto layer 2 solutions
Here are the best L2 projects for the Ethereum blockchain:
Currently, polygon layer 2 is the most popular L2 solution. Like Visa, Polygon layer 2 can handle a maximum of 7000 TPS.
Furthermore, polygon provides approximately 900 dApps for credit, gaming, NFTs marketplaces, gambling, etc.
Layer 2 polygon enhances speed and lowers the cost of transactions. Remember, users transacting on Ethereum mainet have to shoulder colossal gas fees to complete settlements. And this translates to high costs of doing business.
The classic Proof-of-Work (PoW) consensus mechanism than Ethereum base net depends on vast amounts of power. Instead, layer 2 polygon depends on Proof-of-Stake (PoS), which is friendly to the environment due to minimal energy consumption.
The future of polygon layer 2 looks bright as multiple businesses want to launch their projects in the ecosystem.
Optimism layer 2 is an Ethereum solution that supports dApps. The solution works by putting all settlement information on-chain and processing calculations off-chain. This enhances Ethereum’s speed and lowers gas fees.
The magic bullet for optimism layer 2 is its use of optimistic roll-ups, enabling folding many transactions into a single settlement. The roll-up transaction is completed on another decentralized ledger, and results are delivered to Ethereum’s mainnet.
Uniswap shows that optimism layer 2 has led to a 100× decrease in transaction fees. Furthermore, the solution doesn’t compromise scalability for security.
Besides addressing the issue of scalability, Cartesi crypto layer 2 resolves the issue of affinity with multiple legacy technologies. The L2 solution uses Cartesi Machine to overcome compatibility problems. Cartesi uses a native token, CTSI, to incentivize node operators and encourage them to conduct sincere and transparent commitment to the platform.
Arbitrum is one of the layer 2 scaling solutions that are gaining popularity. The Blockchain development project has features that enhance interoperability with the Ethereum mainnet. This mainly facilitates quick cross-compilation of intelligent contract blockchain development.
The xDAI is an Ethereum-based L2 solution that enhances transaction speed and lowers costs. It uses PoS to facilitate the staking of xDAI tokens. The xDAI token is a stablecoin, meaning that it’s pegged to the US dollar and less prone to wild swings.
Scalability and transaction speed have been significant issues bedeviling blockchain development. The emergence of layer 2 solutions helps to surmount these problems. So, understanding the available Layer 2 solutions is critical in your blockchain development journey. These solutions can potentially disrupt the blockchain ecosystem and deliver solutions envisioned by the original objectives of decentralization. We’ve explored some L2 solutions in the market.